Trendline breakout trading is very effective in forex market. This breakout strategy can give reversible signal. 200 EMA is used in this strategy to find the trend direction. We will search for trendline breakout in the trend direction. Trend is friend and so we will find our trade setup with the trend using 200 ema and trend line breakout.
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(1) 200 EMA. click here how to set 200 EMA
How to get buy signal
We have to search for buy entry when market price above 200 EMA. We need to draw a trend line like below chart example. Then we will wait for breakout of the trendline. After successful breakout, we can take buy entry. With this same process, we can find buy signal for several times. Look at chart example for more buy trade setup according to this strategy.
How to get Sell signal
We have to search for sell entry when market price stay below 200 EMA. We need to draw a trendline as like below chart example. Then we have to wait for breakout of that trend line. After successful breakout, we will get sell signal according to this strategy. Look at below chart example for more sell setup with trendline breakout
Time frame: H1, H4, Daily. You can use on lower time frame for scalping
Currency pairs: All pairs.
Take profit and Stop loss:Take profit should be 50-150 pips. When any signal hits 50 pips, then move your stop loss at entry point and wait for final take profit.
Stop loss should be placed above swing high for sell signal and below swing low for buy signal.
Risk warning: Be careful about false breakout. This strategy is useful for trendy market. So use this strategy in trendy market condition. You must follow money management theory for following this strategy. For trading with strategy, you need to practice on demo and then use this strategy on real account.